Rite Aid Corp. sold its PCS drug-benefit-management subsidiary for a third less than the buying price two years ago.
PCS, which provides pharmacy-related services to employers, health plans and government agencies, was sold to Advance Paradigm Inc., for $1 billion (a combined offering of cash, notes and stock). Rite Aid retains a 14 percent stake in the combined company.
This move closely follows a by disclosure Rite Aid made that its 1998 and 1999 profits had been overstated by more than $1 billion, and that it lost $1.1 billion in the fiscal year ended Feb. 26. Rite Aid's new chief executive, Robert Miller (formerly with Kroger), declined to say if he felt fraud was involved, leaving that question to government investigations that are already underway.